Coveney's Upper Crust firm taps pent-up sales demand despite cost pressures  

Patrick Coveney recently joined as CEO of Upper Crust after leaving Greencore after 14 years.

Shares in the owner of the Upper Crust chain fell 3.5% despite the positive news.

The catering firm SSP, best known for its Upper Crust railway and airport kiosks, has said a rapid recovery in travel meant annual sales and profit margins would be at the upper end of its forecasts, though it warned over cost pressures. 

Shares in the owner of the Upper Crust chain, which Patrick Coveney recently joined as CEO after leaving Greencore after 14 years last year, fell 3.5%. 

Pent-up demand for summer travel since pandemic restrictions were lifted in many countries has led to disruptions at airports and longer wait times for passengers.

But SSP, which operates in 36 countries, is also facing sky-high costs and inflationary pressures, as well as lower consumer spending amid a cost-of-living crunch. 

We are well-positioned to benefit from the continued recovery of the travel sector, notwithstanding the current challenges of airport disruption, labour shortages, and industrial action across certain air and rail markets," SSP said in a statement. 

SSP expects annual sales to be at the upper end of its £2bn (€2.3bn) to £2.1bn forecast range, and core profit margins of around 6%.

"We see travel concession operators as a way to play the recovery in travel without the capital risk or ESG (environmental, social, and governance) challenges of investing directly in transport assets like airlines," broker Stifel said, referring to investment rules.

SSP said the strong recovery in air travel had boosted its British sales, but rail operations were dented by strikes that brought the network close to a standstill over several days last month.

British rail and transport workers this week voted for strike action in a dispute over pay, threatening more disruption.

SSP said group revenues averaged 72% of its 2019 pre-Covid-19 levels for the nine months to the end of June.

The London-listed firm said it was confident it could mitigate the impact of the pressures by increasing prices and productivity. 

Reuters